Matinas BioPharma(MTNB) - 2024 Q4 - Annual Report

PART I Item 1. Business Matinas BioPharma Holdings, Inc. is a clinical-stage biopharmaceutical company focused on its lipid nanocrystal (LNC) platform delivery technology, with MAT2203 as its lead product candidate - Matinas BioPharma is a clinical-stage biopharmaceutical company leveraging its lipid nanocrystal (LNC) platform delivery technology[18] - The lead product candidate, MAT2203 (oral amphotericin B), is a highly potent antifungal drug, now positioned for a single Phase 3 registration trial (ORALTO trial) for invasive aspergillosis[19] - Following an 80% workforce reduction in late October 2024, the Company paused further clinical development of MAT2203 to pursue licensing, sale, or other strategic transactions, while maintaining intellectual property and supporting its Expanded/Compassionate Use Access Program[22] Background The company is a clinical-stage biopharmaceutical firm focused on its LNC platform, with MAT2203 as its primary antifungal drug candidate Corporate Events Recent corporate events include regaining NYSE American compliance, a reverse stock split, FDA agreement on MAT2203's Phase 3 trial, workforce reduction, and a recent $3.3 million financing round - Regained compliance with NYSE American listing standards regarding low share price (March 2024)[24] - Stockholders approved an authorized share reduction and a reverse stock split (1:50 ratio) in November 2023, which became effective on August 30, 2024[24][25] - Announced agreement with the FDA on the design of a single Phase 3 registration trial (ORALTO trial) for MAT2203 in invasive aspergillosis (February 2024)[24] - Terminated negotiations for global licensing rights to MAT2203, leading to an 80% workforce reduction and cessation of certain product development activities (October 2024)[25] - Received a deficiency letter from NYSE American for failing to hold an annual meeting in 2024 (January 2025)[25] - Entered into a securities purchase agreement in February 2025 to sell Series C Convertible Preferred Stock and warrants for $3.3 million gross proceeds, with funds focused on reducing operating expenses and exploring strategic alternatives for MAT2203[25][26] MAT2203 MAT2203 is an oral amphotericin B formulation with QIDP, Fast Track, and Orphan Designations, demonstrating efficacy and reduced toxicity in clinical studies - MAT2203 is an oral formulation of amphotericin B, designed to reduce renal toxicity and allow for prolonged, convenient oral administration, potentially increasing efficacy[27] - MAT2203 has Qualified Infectious Disease Product (QIDP) and Fast Track Status for several indications, and Orphan Designation for cryptococcosis, potentially offering up to 12 years of marketing exclusivity[28][47][48] - The EnACT Phase 2 study for cryptococcal meningitis showed MAT2203 exceeded the primary endpoint for Early Fungicidal Activity (EFA) (0.38 log10 CFU/mL/day vs. >0.20 threshold) and demonstrated 90% overall survival at 18 weeks in Cohort 2, with significantly lower kidney toxicity and anemia compared to IV amphotericin B[30][31][33] - The planned ORALTO Phase 3 trial for invasive aspergillosis will be a randomized, multicenter, open-label study comparing MAT2203 as an oral step-down treatment to standard of care, with all-cause mortality at day 42 as the primary endpoint[34][35] - The MAT2203 Compassionate/Expanded Use Access Program has enrolled 37 patients, with 15 completing treatment (median 16 weeks); 8 had a complete response and 7 improved All patients experiencing renal toxicity on AmBisome saw renal function return to baseline after switching to MAT2203[42][43][44] Strategy The company's strategy focuses on monetizing MAT2203 through partnerships, conserving cash, and exploring other strategic options, leveraging its QIDP, Fast Track, and Orphan Drug designations - The company's strategy focuses on monetizing MAT2203 through partnerships to advance Phase 3 development and commercialization, while conserving cash and evaluating other strategic options like in-licensing assets or mergers[49] - MAT2203 has received Qualified Infectious Disease Product (QIDP) and Fast Track designations, along with Orphan Drug Designation for cryptococcosis, potentially granting up to 12 years of marketing exclusivity in the U.S. upon approval[47][48] Antifungal Market Opportunity The global antifungal market is projected to grow, driven by the high incidence and mortality of invasive fungal infections, and the urgent need for new, less toxic treatments due to rising drug resistance Global Antifungal Market Overview: | Metric | 2023 Value | 2030 Projected Value | | :----- | :--------- | :------------------- | | Overall Global Antifungal Market | ~$15.8 billion | ~$20.5 billion | | Global Invasive Fungal Infection Market | >$7.2 billion | ~$10.4 billion | Estimated Annual Incidence in U.S. (Cases): | Condition | Cases | | :-------- | :---- | | Invasive Candidiasis | ~46,000 | | Invasive Aspergillosis | ~15,000 | | Cryptococcal Meningitis (CM) | ~4,900 | - The market faces challenges including high treatment costs (e.g., aspergillosis-associated hospitalizations cost over $1.3 billion in the U.S.), rapid disease progression, high mortality rates (20%-50%), and increasing drug resistance to existing antifungal classes, highlighting an urgent need for new, less toxic agents[50] Exclusive License Agreement with Rutgers University The company holds an exclusive license from Rutgers University for its LNC Platform, involving tiered royalties, a sales milestone, and an annual license fee - The company holds an exclusive license from Rutgers University for certain patents related to its LNC Platform, acquired through Aquarius Biotechnologies Inc[51] - The agreement includes tiered royalties (low to mid-single digits) on net sales, a one-time $100,000 sales milestone, and an annual license fee of $50,000 The license term extends until at least 8.5 years from first commercial sale or patent expiration, whichever is longer[51][52] Intellectual Property The company protects its product candidates and LNC Platform through a combination of patents, trade secrets, FDA exclusivity, and contractual restrictions - The company protects its product candidates and LNC Platform through patents, trade secrets, know-how, FDA exclusivity, and contractual restrictions[53] - Exclusively licensed patents from Rutgers cover LNC Platform chemistry and MAT2203, including 1 pending U.S. non-provisional application, 6 U.S. patents, and 49 granted foreign patents, extending protection until at least 2033[54] - Matinas-owned patent portfolio includes 5 pending U.S. provisional applications, 2 pending U.S. non-provisional applications, 2 pending PCT applications, 13 pending foreign applications, and 20 granted foreign patents, with expirations ranging from 2036 to 2043 for various LNC compositions and methods[55][56][57][58][59][60] Competition The biotechnology and pharmaceutical industries are highly competitive, with MAT2203 facing competition from established antifungal classes and other clinical-stage product candidates - The biotechnology and pharmaceutical industries are highly competitive, with many competitors possessing greater resources and more advanced product candidates[64] - MAT2203, if approved, will compete with established antifungal classes (polyenes, azoles, echinocandins) and branded therapies like Cancidas, Eraxis, Mycamine, Diflucan, Noxafil, Vfend, Sporanox, Cresemba, AmBisome, Abelcet, Rezzayo, Brexafemme, and generic amphotericin B deoxycholate, as well as other product candidates in clinical development[67] Manufacturing The company currently leases in-house manufacturing capabilities for clinical supplies but is exploring third-party contract manufacturers for future development and commercialization - The company currently leases in-house manufacturing capabilities for MAT2203 clinical supplies but is exploring third-party contract manufacturers for future development and commercialization[68] - There are several potential third-party suppliers for amphotericin B, the active pharmaceutical ingredient in MAT2203, and the company believes it can secure sufficient supply[69] Sales and Marketing The company currently lacks a sales and marketing infrastructure and plans to rely on partnerships for commercialization -